Tech Dollars ... in Hollywood?
Hollywood's dot-com boom went bust. What types of entertainment-related technology will venture capitalists look to next?

by Mark London Williams

3/15/01

A recent report from the Los Angeles Regional Technology Alliance, a nonprofit that advises Southern California venture capitalists, notes that despite Hollywood's reputation as the global capital for entertainment, there's still no one "safe bet" for entertainment-minded tech investors these days.

For all of Hollywood's car chases and epic love stories, there's plenty of doubt about whether Tinseltown can drive reinvestment in the technologies behind the glitter - new authoring and distribution tools--especially after the domino-style collapse of so many Web content plays over the past year. Despite the uncertainty, LARTA CEO Rohit Shukla, who oversaw production on the 40-page report, says he expects at least one entertainment-related technological breakthrough - secure video on demand - to begin rolling out by summer. And a number of venture capitalists say they have their eyes on the future, as well, though they're returning to the fundamentals.

One is Lynda Keeler, who left her post as VP and general manager for Columbia TriStar Interactive to become chief marketing officer and managing director for the L.A. beachhead of the Redleaf Group, an international venture capital firm. She believes L.A. will continue to give rise to entertainment companies specializing in new versions of old processes, from motion capture to post-production. Keeler's partner at Redleaf, senior director Bridget Karlin, adds that the buzzword for future serious investment in entertainment startups is no longer content, it's "the enabling technology" behind content.

She acknowledges that even though L.A. didn't exactly turn out to be a launching pad for entertainment dot-coms, it's important for the next generation of entertainment companies to be "closer to the industry."

"Everybody expected Los Angeles to be the content capital of the world," adds Frank Creer, a founder and managing director at Zone Ventures. Bandwidth was the Achilles' heel, he says, which is why he believes regional companies, like Irvine, Calif.-based broadband provider Broadcom, can serve as anchors for an economic rebound. Southern California "will be a hotbed for new startup technologies," he avers, citing video compression - a prerequisite for a successful VOD system - as among the more entertainment-specific ones.

Creer says he's laying all his chips on the technical side of the field - including wireless technologies and middleware solutions that allow information to be transported seamlessly from one platform to another - e.g. from a desktop to a PDA to a phone. Those technologies may have implications for entertainment, or "content," but they're not beholden to those providers.

For years, show business has enjoyed a reputation for being "recession proof," and if Hollywood can help pull tech investments out of the cellar, that reputation may yet be fully earned.

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